Business Post trading statement
Since the Interim Announcement of 14 November 2005, the Board’s expectations of margin improvements in the Group’s Parcel Services business, resulting from improved selling prices and lower costs, have not been achieved.
On 5 December 2005, Guy Buswell was appointed Chief Executive. He has made a number of significant changes to the management team designed to simplify and streamline the management of the Group’s activities and provide greater focus to those areas requiring margin improvement. A strategic root and branch approach is now being adopted to the development of the business focusing on customer mix, service and cost control. These changes have already yielded an improvement in the quality of service provided to customers.
As part of his assessment of the business as its new Chief Executive, Guy has concluded a review of the franchise network and identified that further one-off investment of £1.5m is required in order to secure its long term future. Accordingly, it is anticipated that the additional costs relating to the franchise network will be around £4.5m in the current financial year.
Consequently, the Board now expects profit before tax and exceptional items for the year to 31 March 2006 to be approximately £9m. Exceptional items are expected to total £4.2m, comprising a provision of £3.2m against amounts owed by certain franchises relating to prior years, as previously disclosed, and costs of £1.0m for management changes.
Trading in Specialist Distribution Services remains satisfactory. UK Mail continues to trade ahead of the Board’s expectations. Service quality remains high and the Group continues to attract significant levels of new business. The Group has a strong balance sheet and is well placed to fund further investment, in particular for UK Mail.
Enquiries:
Business Post Group plc on 27 Jan: 020-7012 2000
Guy Buswell (Chief Executive) 0121-335 1111
Peter Fitzwilliam (Finance Director) 01753-706 070
Bankside Consultants Limited 020-7367 8851/
Charles Ponsonby 07789-202 312
Conference call:
Guy Buswell and Peter Fitzwilliam will conduct a conference call for analysts and investors at 09.00 today, Friday 27 January 2006, which can be accessed by dialling 020-7162 0025 and quoting Business Post. The call will be recorded and available for seven days on 020-7031 4064 via pass code 692075.
